While I support adequate rates for coastal properties, there still needs to be some funding mechanism to deal with the timing issue — i.e., if the \”big one\” happens in year one, paying the claims will cost more than one year\’s worth of adequate premiums.
Once again the value of good underwriting practices are exposed. Good underwriting produces solvency and profits. Assigned risk programs of any kind cannot do this.
They are only an opportunity for loss, then the only question is who picks up the bill for the shortage.
It is time to think outside the box! TWIA rates should be increased to reflect the exposure. There should be more than two rating tiers to reflect that potential loss decreases as you move inland from the Gulf. Maybe a dividend program for individual policy holders to return some premiums in good years. Increase the 20% write out limitation to encourage more companies to write first and second tier business.
And while they\’re at it…….. perhaps TWIA should consider including all of Harris County as a coverage territory, since more and more companies are treating Harris County like Tier I, especially for Builders Risk, by declining to write Wind coverage or slapping a $50,000+ per occurrence deductible on the risk. ICAT\’s new B/R Wind program is of no value for our accounts because of the limited eligible property and cost ($10,000/mill minimum!!!).
Did I understand this correctly? They want to surcharge policies for the ENTIRE state of Texas to pay for the shortage. How about not living where you know you will be blown away once every couple of years? Just not fair.
Just where would you go that does not have natural disasters? Or, do you mean that inland Texas does not have tornados? Perhaps tornados are no longer windstorm?
The answer is simple, it is called the law of large numbers, and this is what we live by. This is why rates increased nationally after the 9/11 tragedy.
I am not trying to be mean, but that is how it is supposed to work.
The way I understand it, all companies doing business in the state are charged a proportionate amount to cover losses in the Windstorm Association. They have an opportunity to lose money in the wind pool and no opportunity to make money there. Any time you have a dead weight everybody has a heavier load to carry.
Guess why most companies don\’t do business in Texas.
While I support adequate rates for coastal properties, there still needs to be some funding mechanism to deal with the timing issue — i.e., if the \”big one\” happens in year one, paying the claims will cost more than one year\’s worth of adequate premiums.
Once again the value of good underwriting practices are exposed. Good underwriting produces solvency and profits. Assigned risk programs of any kind cannot do this.
They are only an opportunity for loss, then the only question is who picks up the bill for the shortage.
It is time to think outside the box! TWIA rates should be increased to reflect the exposure. There should be more than two rating tiers to reflect that potential loss decreases as you move inland from the Gulf. Maybe a dividend program for individual policy holders to return some premiums in good years. Increase the 20% write out limitation to encourage more companies to write first and second tier business.
I like those suggestions.
notice how large the shortfall is even after assssments. i agree, but we probably need even more radical change
And while they\’re at it…….. perhaps TWIA should consider including all of Harris County as a coverage territory, since more and more companies are treating Harris County like Tier I, especially for Builders Risk, by declining to write Wind coverage or slapping a $50,000+ per occurrence deductible on the risk. ICAT\’s new B/R Wind program is of no value for our accounts because of the limited eligible property and cost ($10,000/mill minimum!!!).
Did I understand this correctly? They want to surcharge policies for the ENTIRE state of Texas to pay for the shortage. How about not living where you know you will be blown away once every couple of years? Just not fair.
Well, don\’t stop there carlfarm, make a suggestion.
Just where would you go that does not have natural disasters? Or, do you mean that inland Texas does not have tornados? Perhaps tornados are no longer windstorm?
The answer is simple, it is called the law of large numbers, and this is what we live by. This is why rates increased nationally after the 9/11 tragedy.
I am not trying to be mean, but that is how it is supposed to work.
The way I understand it, all companies doing business in the state are charged a proportionate amount to cover losses in the Windstorm Association. They have an opportunity to lose money in the wind pool and no opportunity to make money there. Any time you have a dead weight everybody has a heavier load to carry.
Guess why most companies don\’t do business in Texas.